Revenge of the Nerd: Physicist Becomes Pentagon’s Top Deputy

Out with the defense-industry exec, and in with the physicist-turned-logistics-geek. Ashton Carter, the Oxford-educated scientist currently serving as the Pentagon’s top weapons buyer, has been nominated to be the new deputy secretary of defense. That’ll make him the Pentagon’s No. 2 civilian official, responsible for the day-to-day operations of the nearly $550 billion Defense Department. In effect, Carter becomes the military’s chief operating officer. He replaces Bill Lynn, the one-time Raytheon executive and Pentagon comptroller.

In his two years as the Under Secretary of Defense for Acquisition, Technology and Logistics, Carter oversaw the Pentagon’s efforts to get more efficient, and smarter at amassing its arsenal. Shortly after he took office, the Defense Department killed off some of its biggest weapons boondoggles, including the Army’s $200 billion family of networked tanks and trucks, Future Combat Systems. Since then, thousands of armored trucks and hundreds of spy drones were rushed to Afghanistan. The Joint Strike Fighter — the stealth jet family that’s the Pentagon’s biggest weapons program ever — went from spiraling out of control to salvageable.

Carter encouraged Pentagon program managers to – gasp! – try to save the government money, and not just hit some arbitrary development deadlines. He enforced new rules that required defense contractors to share in the pain if their projects went over-budget. “When we get to $120″ on a $100 item, Carter said last year, “I’m out of Schlitz and it’s all yours.” Shortly thereafter, the Defense Department finally managed to sign a contract for a fleet of new tanker airplanes, after a multi-decade wait. And the contract was favorable enough to the government that tanker-maker Boeing has already begun complaining that maybe they underbid.

Even before the latest budget-cutting deal on Capitol Hill, Carter was leading an effort to squeeze more out of the Pentagon’s accounts. “The Department of Defense is entering a new era in defense spending that’s going to require us to change the way we do business,” Carter recently told an audience (.pdf) at the Brookings Institution (full disclosure: I’m a non-resident fellow there). “This new era will require a different mindset for our government and industry managers and their congressional overseers, a generation of whom have grown accustomed over the post 9-11 decade to a circumstance in which they could always reach for more money when they encountered a managerial or technical problem or a difficult choice. Those days are gone.”

While amateur budgeteers like to target the Defense Department’s weapons systems, Carter added, the real money was “below the waterline” — in the maintenance and operation of those arms, the logistics to cart them around the warzone, and in services. Maintenance counts for 70 percent of a weapon’s cost, and accounts for $100 billion in the Pentagon’s annual budget. Supply and transportation take up another $100 billion. “And for every 45 cents we spend on things, we spend 55 cents of services,” for a total of $200 billion, he noted.

Carter beat out Michele Flournoy, who runs the Pentagon’s higher-profile policy shop, for the new job. Flournoy is better-known, and was in some ways the favorite to become the Defense Department’s #2. (She’s certainly a more engaging public figure than Carter, who delivers lectures just like you’d expect a physicist would.) But Carter is the smarter choice, defense insiders say. He’s been forced to manage the Pentagon’s byzantine procurement and logistics chains — which makes for better preparation for the Herculean management duties that await him.

Carter’s not the first nerd to get the job. Bill Perry, who was the Pentagon’s #2 during the early Clinton years, got his PhD in math. John Deutsch, who came after Perry, earned his doctorate in chemistry at M.I.T. David Packard, who was “DepSecDef” in the Nixon Administration, was the co-founder and president of the Hewlett-Packard technology firm.